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The mayor had proposed laying off 4,400 teachers in his budget plan last month. The job cuts were part of his plan to make up for hundreds of millions in aid the city expects it won't get from the state.

Updated at 11:39 PM EDT on Wednesday, Nov 14, 2012

Mayor Michael Bloomberg announced today that New York City teachers won't get planned raises for the next two years, but their jobs will be saved. The teachers' union, however, applauded the saving of jobs but said the mayor has overstepped his bounds when it comes to cutting teacher raises.

Shortly after the mayor's office issued a statement saying jobs would be saved because of canceled raises, the union put out statement saying mayor cannot single-handedly decide union contracts.

"The Mayor has the power to unilaterally rescind the proposed layoffs, and I’m glad that he has made the right decision to avoid massive disruptions to our schools," United Federation of Teachers President Michael Mulgrew said in a statement. "But he does not have the power to unilaterally decide on the teachers’ contract, and we have reached no agreement on his proposal to freeze teacher pay.

Bloomberg had proposed laying off 4,400 teachers in his budget plan last month. The job cuts were part of his plan to make up for hundreds of millions in aid the city expects it won't get from the state.

But the mayor said in a statement Wednesday that he has canceled the 2 percent raises planned for teachers for the next two years. He says it is not an ideal solution but will save those teachers' jobs.

"When it came to a choice between teacher raises or laying off teachers, I have chosen to protect our children and their futures," Bloomberg said in a statement. " While other towns and cities around the country are closing schools and laying off teachers, our Administration is determined to do everything possible to keep our teachers where we need them: in the classroom."

The budget plan last month called for shrinking the 300,000-person city workforce by nearly 11,000 jobs through 6,000 layoffs and 5,000 by attrition.